I was the president of Pfizer Global Research and Development in 2007 where I managed more than 13,000 scientists and professionals in the United States, Europe, and Asia. I've received numerous awards including an Honorary Doctor of Science degree from the University of New Hampshire. I am also the author of "Drug Truths: Dispelling The Myths Of R&D" and the recently published Devalued And Detrusted: Can The Pharmaceutical Industry Restore Its Broken Image?" I am also a senior partner at PureTech Ventures.

There's Value in Studying Big Pharma Pipelines

When analysts review a big pharma’s future prospects, they rightly focus on those drugs that are in the last stage of clinical trials (phase 3). These are the compounds for which the most is known and whose clinical programs are spelled out in detail on ClinicalTrials.gov. While not every compound in Phase 3 will successfully navigate the development process to FDA approval, a majority of them will, thus allowing analysts a sense of what is on the horizon.

However, there is value in reviewing a company’s entire pipeline, particularly the earlier assets, i.e. the compounds in early human studies (phase 1) and those in the proof of concept stage where they are tested for efficacy in patients (phase 2). While the majority of these compounds will fail for any variety of reasons, one can learn a lot about a company’s priorities, strategies and even the cultural issues that it might be struggling with by analyzing early stage pipelines.

How readily available is this information? One might think that a company would be very secretive about its early assets, but, surprisingly, some companies are incredibly transparent about their pipelines. Anyone can go to a particular company’s website and under its R&D section and find, depending on the company, a remarkable amount of information. The companies with the greatest pipeline transparency are GSK, Sanofi and AstraZeneca (AZ). These companies list every compound in their pipelines by compound number, mechanism of action, and the disease for which it is being studied. AZ even reveals the date that each compound began the phase of testing that it’s in, so one can gain a feel for “dwell times” – the time it is taking for a compound to advance through a pipeline.

Other companies are a bit more secretive. For example, Bristol-Myers Squibb (BMS) provides a list of agents that are in Exploratory Development, which it defines as “Post-discovery through phase 2”, so one cannot get a sense of exactly where the compounds are in their respective stages of early development. Pfizer lists the compound number, its stage of development and the disease indication, but no mechanisms of action (MOAs) are given for how the compound may work in treating a given disease like diabetes or depression. Merck is even more cryptic in that it too doesn’t give the MOAs for its phase 2 candidates and it doesn’t even provide any information on phase 1 compounds. Lilly is a bit schizophrenic with its pipeline in that the MOA is included for some compounds but not others – presumably the latter must be deemed so novel that their mode of action must be kept particularly secret. It appears that Lilly has a partial transparency policy.

Novartis bypasses the whole phase 1, 2, 3 issue by simply listing its clinical pipeline by the anticipated roll-out of New Drug Applications (NDA). I guess one can assume that its listing of filings of compounds after 2015 corresponds to its current phase 2 portfolio. But J&J wins the prize for the least amount of transparency of its pipeline. The only thing I found (and perhaps I missed something) was a chart listing “Selected Pharmaceuticals in Late Stage US and EU Development or Registration”. This contained only phase 3 compounds – and it was “as of January 20, 2009”!

So, what can one learn from perusing this information? First of all, one can get a real sense of the therapeutic areas (TAs) a company is focused on as well how successful a company’s efforts are in that TA. A company with an enunciated commitment to oncology with only one or two compounds in early development is having trouble if it wants a future presence in that TA.

The relative size of these portfolios is also interesting. The GSK portfolio is huge in terms of numbers as well as breadth. OK, I realize that there are those who believe that size doesn’t matter, that it’s the quality of the compounds that matter and not the numbers. But GSK has a pipeline (February 2012 data) with over 125 entrants, while Pfizer’s (November 2012 data) contains 78. Does one believe that GSK is far less discriminate than Pfizer in building its pipeline? I would personally be more comfortable with the larger pipeline.

What is a company’s commitment to biologics vs. small molecules? One can find that in the pipelines of a number of companies. Ditto for its commitment to rare (or orphan) diseases. How important can a strategy be if there aren’t compounds in the pipeline to back it up?

The impact of other company events can all be measured in studying these pipelines. Pfizer has been out-licensing a number of early development compounds as it has slashed its R&D budget. As a result, its pipeline which contained 114 compounds in February, 2011 now has the aforementioned 78. Both Pfizer and AZ have a number of compounds that have extended periods in phase 1 and phase 2 – well above the industry norm. This could be a reflection of the R&D organizational changes these companies have experienced over the last few years. Conversely, a compound that is moving quickly through a pipeline is probably one being given a high internal priority and added resources to speed it through to key decision points.

Those familiar with the trials and tribulations of pharmaceutical R&D know that pipelines are fragile, and future success of these valuable assets are never guaranteed. But one can learn a lot about a company by closely looking at these published data.

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Regarding getting “a real sense of the therapeutic areas (TAs) a company is focused on,” one can also gain a fascinating perspective from those companies that provide extensive details of their in-licensing interests. Merck is a good example: http://www.merck.com/licensing/areas-of-interest/home.html.

Perhaps even more revealingly, they list areas that they are NOT interested in, which provides great insight into what they see as already scientifically or commercially tied up in one way or another.